Centuria Capital Group

Thank you for standing by and welcome to the Centuria Capital Group HY26 results. All participants are in listen-only mode. There will be a presentation followed by a question and answer session. If you wish to ask a question, you will need to press the star key followed by the number one on your telephone keypad. I would now like to hand the conference over to Mr. John McBain, Centuria Capital Group's Joint CEO. Please go ahead.

Good morning, everyone. Thank you for joining us. I'm John McBain, Joint Chief Executive. With me today is my fellow Joint CEO, Jason Hulich, and our Chief Financial Officer, Simon Holt. Also, Tim Mitchell and Peter Ho from our Investor Relations and Corporate Strategy team. Today we'll cover group performance for the half, divisional execution, our financial position, and our strategy and outlook. The group delivered repeatable earnings growth for the half. underpinned by both contracted and recurring revenue streams and conservative balance sheet settings. Execution during the half has improved forward earnings visibility, supporting our decision to upgrade FY26 operating earnings guidance to 13.6 cents for security. I'll begin with an overview of the group's performance and our through cycle approach to growth. Jason will cover divisional performance across property funds management investment, real estate finance and data centres. Simon will cover the financial results before I comment on strategy and outlook. The outcomes for the half are summarised on slide 4. Group assets under management increased by 6% to $21.8 billion, supported by strong contributions across property funds management and real estate finance. Across the property platform, we executed approximately $500 million of real estate acquisitions during the half and are on track to exceed our $1 billion full-year target. We also completed the acquisition of the Arrow Funds Management Platform, adding $440 million of agriculture AUM and further strengthening our private investor and family office networks. This execution and improved earnings visibility underpins our decision to upgrade FY26 earnings to 13.6 cents, representing an 11.5% uplift on FY25. This upgrade reflects underlying run rate momentum rather than one-off items. Moving to the platform overview on slide five, which highlights the scale and diversification of Centuria today, and what matters for earnings quality and capital allocation. Virtually all verticals now exceed $1 billion in assets under management, supporting operating leverage while preserving flexibility in how and where we deploy capital. We operate across listed and unlisted vehicles, real estate and credit, and span most major property sectors across Australia and New Zealand. Diversification is not just about earnings volatility reduction. It allows us to allocate capital based on risk-adjusted returns and investor demand rather than being forced to pursue growth in any single product, sector or market. In the current volatile environment, that flexibility is vital. As the platform continues to scale, we see opportunities for margin expansion over time without reliance on any single product, sector or capital source. Slide 6 demonstrates how diversification has supported earnings and AUM resilience through the sharpest rate-hiking cycle in decades, with Group AUM achieving a new record in this half. While performance fees can introduce period-to-period volatility, the underlying base of management fees, property income and credit earnings continue to grow. This reinforces our conviction that the platform is designed to perform through the cycle, not just in support of market conditions. Turning briefly to the broader environment on slide 7. Despite higher rates, Centuria Platform's weighted average cap rate and product returns remain significantly above term deposit rates, and we continue to capture opportunities across real estate and transaction markets, many of which are showing signs of constrained supply and improving rental growth. Structural capital flows also remain supportive. These include ongoing superannuation inflows, continued SMSF growth and approximately $30 billion of capital expected to be repatriated from exploring bank hybrids over the coming years. Going to slide 8. Private credit remains a strategic priority for Centuria and a good example of disciplined growth in a structurally expanded segment. We have been active in real estate credit since 2016. partnered with Bass Credit in 2018 and following a strong track record we acquired a 50% interest in 2021 with the platform growing at a compound rate of approximately 36% per annum since that time. We increased our stake to 80% in 2024 and this morning as previously forecast we announced we have exercised our option to increase our interest to 100%. During the half, this business executed approximately $1.4 billion of total loan origination, restructuring and exit activity. Market share remains modest at around 1%, highlighting significant runway for the group within a large and growing market. Importantly, The previously announced succession and integration plan for Centuria Bass remains in place, with David Giffen and Yohuda Gottlieb being promoted from within the business to CEO and Deputy CEO respectively. We believe steps such as this support continuity and long-term sustainable growth. I'll now hand over to Jason to go through the divisional performance in more detail.

Thank you, John, and good morning, everyone. After year 26 was another consistent period of execution for the property platform as illustrated on slide 10. Property funds management AUM increased by 5% to $18.3 billion during the half. We executed approximately $700 million of real estate acquisitions and divestments, supported by strong engagement from unlisted investors, which has underpinned transaction execution as other sources of capital have tightened. Property fundamentals remained supportive, with limited Ford supply and improving rental growth across most sectors, underpinning earnings visibility. Turning to slide 11. The half was a period focused on integration and value creation. We established Australia's largest unlisted single asset industrial fund at Port Adelaide, with strong participation across our investor base and significant owner subscriptions. In agriculture, we secured Australia's largest hydroponic glasshouse by an off-market acquisition and commenced capital raising ahead of settlement. Listed lease continue to selectively recycle capital, demonstrating the ability to divest assets at premiums to book value, as well as generate strong leasing outcomes to improve the income profiles of each portfolio. Slide 12. Distribution remains one of Centuria's most important competitive advantages. Coming to the year 25 was a strong period for new investors joining the platform, including more than 460 investors and family offices acquired through the Arrow transaction. Early engagement with these investors is already translating into interest across additional Centuria products, consistent with the proven integration blueprint applied across our M&A activity. We saw a similar outcome following the Prime West merger, where five years on, strong integration and ongoing engagement has resulted in approximately 50% of Prime West investors committing to other Centuria products beyond their original investment. This behaviour reflects the strength of Centuria's unlisted real estate platform, where investors can self-diversify across multiple strategies within a single platform. Today, we have over 15,500 unlisted investors. with more than 1,600 invested in three or more Centuria funds, and almost 10% of these invested in 10 or more funds. This depth of engagement supports capital recycling as funds mature and position Centuria to consistently repatriate and redeploy private capital. We believe this distribution capability is difficult to replicate and represents a durable competitive moat for Centuria. Turning to property and development finance on slide 13. Property and development finance AU increased by approximately 9% to $2.5 billion during the half. During the half, Centura Bass Credit executed approximately $1.4 billion of loan origination, restructuring and exit activity, while also raising $200 million of gross unlisted investor inflows. The business remains well positioned for further growth beyond its current market share of around 1% of Australia's private credit market. Turning to slide 14, we can see that growth has been achieved alongside high volume origination, restructuring and loan repayment activity. This has been paired with a strong focus on managing the books composition, which remains largely exposed to residential asset-backed lending. Growth has not come from stretching average LPRs or loan structures across the overall book. Centuria Bass Credit is highly operational, hands-on business within Centuria, underpinned by deep in-house expertise. Since the JV commenced in 2021, we have made targeted investments in systems, processes and people to support scalable growth while maintaining disciplined risk management. In addition, Centuria Bass benefits from Centuria's broader platform, governance, distribution and development as required. The slide 15 highlights insurers' track record of progressively building the platform over time, primarily through organic growth selectively supplemented by inorganic opportunities. From a data centre perspective, the key takeaway is that this represents the early stages of long-term demand drivers. Slide 16. To further emphasise this evolving strategy, slide 16 highlights that data centres and sovereign AI represent long-dated strategic optionality within a market characterised by sustained demand and significant capacity constraints. Accordingly, our current focus is on progressing planning and across identified sites. As tangible milestones are achieved, we will assess the most appropriate value realisation pathways on a site-by-site basis. Reset data remains an early stage of the strategy. Since acquiring an interest in the business, we have partnered with leading global operators, successfully launched Australia's first public Solomon AI factory, and scaled internal capability following initial integration. The business is now transitioning into an early commercialization phase as customer onboarding progresses, which is expected to support improving profitability over time. Importantly, capital deployment remains return-driven, fully considers balance sheet integrity, and short-term profitability is not required to meet FY26 earnings guidance. I'll now hand over to Simon to cover the financial results.